What is the purpose of this program? FHA loans provide mortgage insurance for a person to purchase a principal residence in metro or rural areas. The mortgage loan is funded by a lending institution, such as a mortgage company, bank, savings and loan association and the mortgage is insured by HUD.

Advantages about FHA:

• Borrower’s credit can be much lower with FHA versus a conforming loan.  I’ve seen approvals for borrowers with 570 scores.
• Borrower is eligible for approximately 97% financing on a purchase and with the Nehamia program up to 6% of the final contract sales price for down payment and/or closing costs.  So you can buy a home with no down payment out of your pocket and get a great rate!
• Eligible properties are one-to-four unit structures, including farm housing located on 2 acres or more of land adjacent to an all weather road.
• Available for first-time and repeat homebuyers.
• Approved for new construction and resale homes.
• Interest rates are as good as conforming rates.
• Borrower can refinance and take Cash Out for up to 95% of the appraised value!!

FHA is a great option for those who do not own other properties and want to purchase a home with little or no money down. It is also great for borrowers who want to refinance and pull cash out of their home up to 95% of appraised value. FHA however is more expensive and not always the best program. To find out what loan program is right for you just give me a call at 612-481-7841 and we can go over your specific needs to find the right loan for you. Thanks for reading and stay tuned for more market news.

Eric Ollestad, Mortgage Consultant

work (763) 416-2653     cell (612) 481-7841